BBA506 - PRODUCTION AND OPERATIONS MANAGEMENT

SET-1

Q1. Why Production is considered as a heart of an organization? Also explain the importance of
technology in production.

Answer:-

Production as a heart of an organization:

Production is the primary business of an organization. All other wings or activities of an organization
exist subject to the existence of production. Without production or anything to sell, there is no
organization at all. An organization usually has several departments and each department has a
specialized function.

• Marketing establishes the demand for goods and sells what is produced.

• Finance provides the capital for equipment and resources.

• Human Resource Management provides and manages manpower.

Purchasing is concerned with procurement of materials needed to run the organization.

• Materials Management takes care of inventories.

• Law Department safeguards the organization on legal issues.

• Public Relations department builds the image of the organization.

• R&D is responsible for Research and Development.

But it is the production department which produces goods and services. It plays a vital role in achieving
a firm’s strategic goal.

Production involves the greatest bulk of a company’s employees and is responsible for a large portion of
its assets. It also has a major impact on the quality and cost of goods and therefore is the visible face of
the company. Hence we say that production is the heart of an organization.

Importance of technology in production:

Technology makes way for fast and efficient operations in manufacturing companies, as well as
facilitates cost-saving measures. Technology brought significant changes to traditional production
systems that have been so beneficial to all industrial players, including suppliers and customers. A
pharmaceutical company, for example, employs advanced machineries in concocting, capsulizing, and
wrapping medicine. Traditionally, the making of medicine was manually done. However, to prevent
contamination and mitigate errors from human intervention, pharmaceutical companies have employed
robots and computerized machines, resulting in the mass production of medicine at faster speeds and
lower costs. It is now quite difficult to imagine a world without modern inventions. The goal of the
operations manager is therefore to provide the best synthesis of technology and people so that the
objectives of the organization are met. Technological changes have occurred in every industry and can
be categorized into two groups - hardware and software. Hardware technologies have resulted in
greater automation of processes. They perform labour - intensive tasks that were originally performed by
humans. Examples of these major types of hardware technologies are numerically controlled machine
tools, machining centres, industrial robots, automated materials handling systems, and flexible
manufacturing systems. These are all computer - controlled devices that can be used in the
manufacturing of products.

Q2 Define Planning, Organizing and Controlling Functions of Operations Management.

Answer:-

Operations management deals with the activities pertaining to the production of goods and services. As
such, it is essential to study the functions that operations management performs. Broadly, these
activities can be categorized as follows:

Planning

There are certain functions that the production or operations management should perform. Operations
management begins with the discussions for conceiving the design and specifications for the product.
Operations management is involved throughout in the development and production cycles to a stage
where products are ready to be dispatched to the marketing and sales department to provide them to
final consumers.

• Product design and development: This deals with the issues of converting market feedback on the
requirements pertaining to the type of product to be produced into specifications and drawings that help
in production.

• Production process selection: This helps in evaluating different process options possible to produce the
type of product in terms of volume and variety and other factors to select the best-suited process.
• Planning facility location: This deals with evaluation of different possible locations for production and
selecting the most suitable one that meets the organizational objectives of production in the required
quantities at the minimal costs.

• Planning facility layout: This refers to studying various options in terms of plant and machinery layout
that enables the smooth flow of materials for smooth production.

• Capacity planning: This deals with the issues pertaining to planning the capacity for the plant that
enables cost-competitive production event with certain degree of fluctuations in the required volumes.

• Production planning: This helps effectively plan the production to meet the required quantities of
products within the scheduled time.

Organizing

• Work study: Also known as time and motion study, it aims at improving the cycle time required for
producing a product.

• Materials management: This aims at establishing sources for the required materials in terms of input
materials or consumables at the right time so that no delays in production occur.

• Purchasing management: This is responsible for making the input material available in time, at the right
price and in the right quantity and quality.

Controlling

• Stores management: This refers to managing the stores for input materials, consumables and finished
stocks while avoiding overstocking of materials. Stores are also accountable for recording the stock and
consumption of these materials.

• Value analysis: The process of obtaining the best possible combination between cost and required
functional specifications of a product by assigning a value to every operation of the production process
and identifying the function of the product. This helps in enhancing the value of the product.

• Quality control: This is responsible for monitoring the quality requirements of the product so that no
defective parts are passed on to the consumers. For this, systems associated with the processes are
assessed by the management of an organization in order to improve them so that no defective parts are
produced.

• Maintenance management: This is responsible for ensuring the continuous production in terms of
machinery and other required infrastructure so that no breakdowns occur to hamper the production flow.
It also includes proactive preventive maintenance to maintain the health and performance of the
machines in peak condition.
• Inventory management: This is responsible for maintaining minimum inventory of all critical materials
and ensuring that there is no overstocking or stock-out.

Q3. Discuss various steps of Product selection and development.

Answer:- Product selection and development involve a number of steps that are as follows:

● Idea gereration
● Idea screening
● Development process
● Developing of marketing strategy for
● new products
● Business model development
● Actual production of new product
● Test marketing of a new product
● Launching of a product
1. The first stage is idea generation, which means the search for new products. This can also be done
by studying the product of competitors. Companies also seek the advice of the top-level management
for generating new ideas.
2. The second stage includes idea screening. Ideas are listed by companies into three categories:
promising ideas, marginal ideas and rejects.
3. The third stage covers the development process. This stage is characterized by conversion of a
product idea into several product concepts. Out of several product concepts, the most appealing one is
selected.
4. The fourth stage involves developing of marketing strategy for new products. This includes evaluation
of market size, demand of product, growth potential, and estimate of profit in first few years.
5. The fifth stage includes business model development around the new product. Business models start
with sales estimate, purchase frequency, and nature of business.
6. The sixth stage involves the actual production of new product. Decisions are then taken from the
viewpoint of operation as to whether it is technically and commercially feasible to continue production.
7. The seventh stage involves test marketing of a new product. It is made accessible to the select
consumers and feedback sought.
8. The eighth stage involves launching of a product across the target market, backed by a proper
marketing and strategy plan. This stage is called the commercialization phase.
 SET-II

Q1 Define materials management and state its importance and functions.

Answer:-

Materials management can be defined as controlling, organizing and managing materials/stock so that it
guarantees the maximum return for a business. It involves determining the purchase, location, storage,
account-keeping and transportation of stock (planning of moving stock through various processes of
manufacturing, warehouses and channels of distribution).

Materials management differs between organizations, and may include production planning, materials
planning and control, inventory control and stores management, purchasing, movement of materials and
waste management.

Functions of Materials Management

Materials management generally includes the following activities:

• Purchasing

• Procurement

• Distribution

• Warehousing

Importance of Materials Management

Materials management involves a purchasing mix. It deals with material acquisition and the ability to
forecast the goods available in the store and to be supplied on request. The functions are chiefly
executed by the store manager and his duty is to make sure that goods supplied meet the expectations
of the customers.

The most important role of materials management is to ensure that the stores and supply manager
synchronize the business’s demand, sales and issues to enable the manager to be alert when the
organization is running short of stock and avoid making use of its buffer stock. The importance of
Materials management function lies in the fact that the material cost is 60-70% - a significant portion of
the final product cost and hence the significance. This further emphasizes the important role - materials
management personnel play especially in manufacturing organizations and very often a member of the
senior management.
Q2 How Automation is beneficial for manufacturing? Explain Computer-Aided Design (CAD) and
Computer-Aided Manufacturing (CAM).

Answer:-

Benefits of automation in manufacturing:

Automation and advanced technology began in the 1950s with the development of Numerically
Controlled (N/C) machine tools. N/C machining enabled the machinist’s skills to be duplicated by a
computer program that was stored on a computer medium such as punched paper tape. The computer
program controlled the movements of a tool when making complex shapes. Over time, N/C computer
hardware has become smaller and cheaper, computer controlled software has become more
sophisticated, and machine tools have become more complex. This has led to the development of
industrial robots and Flexible Manufacturing Systems (FMS). Advances in computer software and
communications systems have led to improvements in manufacturing equipment and vice versa.
Similarly, the knowledge base on which production planning and control decisions are made has
significantly improved.

Computer-Aided Design (CAD):

Early CAD systems were basically computer-controlled plotting systems; today’s systems revolve
around graphics terminals. CAD allows engineers and designers to work in two and three dimensions
and utilize colour to simplify complex designs. Designers can carry out geometric transformations at high
speeds and can obtain the top, side and front views of design, rotations about any axis and cross
sections. In addition, CAD systems allow the storage and retrieval of designs for easy updating and
automatic creation of Bills of Materials and process information for production planning and scheduling
systems.

Computer-Aided Manufacturing (CAM):

CAM involves computer control of the manufacturing process, such as determining tool movements and
cutting speeds. N/C machines is an old form of CAM, robotics is a modern example. CAM offers
advantages over conventional manufacturing methods. It can be used when several different parts with
variable or cyclic demands are produced, when frequent design changes are made, when the
manufacturing process is complex, when there are multiple machining operations on one part, or when
expert operator skills and close control are required. Each machine in a CAM system has the ability to
select and manipulate a number of tools according to programmed instructions. Thus, CAM provides a
high degree of flexibility in performing and controlling manufacturing processes. When a CAD system
and a CAM system share a common data base, the term CAD/CAM is used. The integration of CAD and
CAM allows for important coordination between design and manufacturing; through such integration the
lead time for process planning can be reduced, quality assurance is improved and cost savings in tool
design and other capital investments can be realized.

Q3 The life cycle of a project can be classified into four stages:

(a) Conception and definition phase,

(b) Planning and organizing phase,

(c) Implementation phase &

(d) Project close. Explain them in detail.

Answer:-

(a) Conception and definition phase

This phase begins with the idea of the project. The idea is explored by listing out the following:

• Raw materials required

• Location selection and plant layout

• Technology/process selection

• Machinery/equipment needed

• Utilities – fuel/ power, water, sanitation, etc.

• Manpower and organization pattern

• Resources needed

(b) Planning and organizing phase

This is a very important phase. In this phase –

(a) Necessary approvals are taken to go ahead with the project.

(b) Finances are arranged.

(c) Project infrastructure is planned – land is obtained, machinery is put in place.

(d) Manpower recruitment and organization structure are finalized. Project leaders are appointed.

(e) Schedules and budgets are finalized.

(f) Licenses and government clearances are obtained.

(g) Contracts are prepared and executed.

(h) Site preparation is done.

(i) Construction resources and materials are put in place.

(j) Work packaging is done. This means the entire project is split into activities and work packages and
roles are assigned.

(c) Implementation phase

This is the actual implementation phase where the work is carried out.

(d) Project close

It is also called project clean-up. Once the project has been implemented, all the drawings, documents,
operation manuals, maintenance procedures/ manuals, etc. are handed over to the customer. Usually a
small portion of the payment is held up till this phase. The final installment of payment is released after
the customer is satisfied with the guarantee test runs.